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Austin Ramirez, president and CEO of Husco International, speaks at a town hall meeting at Husco in Waukesha on the impact of tariffs on manufacturers and farmers. It was attended by business and trade executives and officials as well as employees of the company. Michael Sears / Milwaukee Journal Sentinel

Business and trade executives and officials as well as Husco International employees attend a town hall meeting on the impact of tariffs on manufacturers and farmers. Michael Sears / Milwaukee Journal Sentinel

At Husco International, Dwayne McDonald (left) shows Mery Bayas, a new employee, how to run a work station on a production line that makes a sub-component for a oil control valve used in the automotive industry. Michael Sears / Milwaukee Journal Sentinel

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Austin Ramirez, president and CEO of Husco International, speaks at a town hall meeting at Husco in Waukesha on the impact of tariffs on manufacturers and farmers. It was attended by business and trade executives and officials as well as employees of the company.(Photo: Michael Sears / Milwaukee Journal Sentinel)Buy Photo

The town hall meeting, attended by about 100 people, was at Husco International, a Wisconsin-based company that makes hydraulic and electro-mechanical components for vehicles and construction equipment.

Higher tariffs cost Wisconsin companies $95 million in August, up 47 percent from a year earlier, according to new data from Tariffs Hurt the Heartland, a business group behind the town hall meetings being held in several cities.

The restaurant industry was part of the discussion because various products, from seafood to stoves, are subject to higher costs from trade wars.

It’s tough to pass the additional costs on to consumers through higher prices on the dinner menu, according to Quam.

"Wisconsin consumers are pretty price sensitive. They don't want to see their Friday night fish fry go up a dollar, because that's a big deal," she said.

The typical restaurant operates on only about a 4 percent profit margin, according to Quam.

“Our industry is under a ton of pressure on the pricing side. ... There’s not a lot of room for error,” she said.

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Supporters of the trade wars say the short-term pain some industries are feeling will be offset by the negotiation of better long-term trade agreements.

And, supporters say, the U.S. is long overdue in standing up against practices such as China's theft of manufacturing technology.

About 16 percent of Wisconsin’s workforce is in manufacturing, second only to Indiana, and global trade — from manufacturing, agriculture and other industries — supports roughly 800,000 jobs in the state, according to the U.S. Chamber of Commerce.

“I think the negotiations the Trump administration is doing actually play very well for Wisconsin. Once (businesses) understand that change is inevitable, and they have to move forward, I think they will be fine,” said Van Mobley, a Concordia University associate professor of history who follows trade issues but was not one of the town hall panelists.

Yet many manufacturers disagree, saying that trade wars and tariffs are not only expensive, they could put the brakes on what's been strong economic growth.

GenMet, a metal fabricator in Mequon, says the price it pays for stainless steel has jumped 62 percent since February, and that some metal prices have more than doubled.

The company has passed some, but not all, of the increase on to its customers.

“We’ve been sharing the pain with them,” said GenMet President Mary Isbister.

Raw material prices are now unpredictable, and some materials are in short supply, according to Isbister.

“How can you invest in product development when you don’t know, from week to week, what the cost of goods will be? We used to have six months to a year of pricing in place, that we could plan on and forecast around,” she said.

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Trade wars have a chilling effect on long-term economic growth and could have the unintended consequence of sending work overseas, according to manufacturers at the town hall meeting.

“The uncertainty caused by tariffs and increased prices, and whether or not your customers are going to continue accepting price increases … all ends up in less investment. Eventually it’s going to catch up with us,” Isbister said.

“My personal gut feeling is the president has chosen to implement tariffs, and to remove the country from some of our free trade agreements, more for political reasons than for a true understanding of how it’s going to impact our economy,” she added.

U.S. farmers remain hopeful that new trade deals with Canada and Mexico could help lift them out of a price slump, but the global market remains flooded with agricultural commodities, and tariffs from China and the European Union are making it harder for American farmers to sell their goods overseas.

“An improved agreement with one country is not going to solve the situation,” said Jim Holte, president of the Wisconsin Farm Bureau Federation and one of the town hall panelists.

China has slapped higher import duties on U.S. agricultural products to hurt farmers who backed Trump in the 2016 election and who are represented by powerful members of Congress. Sales of U.S. soybeans to China have nearly dried up.

“My expectation for China is it’s going to take multiple years before we come to any agreement or solution with them. As much as I would love to tell you we could fix this in six months, I don’t believe that’s true,” Holte said.

Manufacturers say they’re looking at every option to mitigate trade war damage, including sourcing products from countries not caught up in the disputes.

Husco International President Austin Ramirez said higher tariffs this year have cost his company more than $1 million a month.

In the long haul, “It’s really impacting our competitiveness and future growth. That’s the scariest part for me,” he said.

Some have argued that tariffs are a necessary hammer in negotiating trade agreements. Ramirez said there are better ways to deal with countries and companies engaged in unfair trade practices.

He pointed to an example, from this summer, when the U.S. and China reached a deal that allowed the Chinese telecom company ZTE to stay in business in exchange for paying an additional $1 billion in fines and agreeing to let U.S. regulators monitor its operations. ZTE had already paid $892 million in fines for breaking U.S. sanctions by selling equipment to North Korea and Iran.

Unlike tariffs, the fines punished a company for wrongdoing but didn't bring down others that weren't involved in the violations, Ramirez said.

He added: “Tariffs ultimately hurt U.S. companies and U.S. consumers more than they hurt our foreign counterparts."